Tuesday, September 6, 2016

Show Me The Money – How to get local CASH for your trip abroad.

In the USA, I think nothing of going into a convenience store, picking up a soda and a snack and paying the $5 bill with my debit card.  In fact, I seldom use CASH to pay for anything in the USA.  Europeans, on the other hand, tend to pay for all minor purchases with CASH. Actually, you’ll be hard pressed to find a merchant in Europe that will accept a credit or debit card for small purchases under $30 USD.  I am a firm believer in embracing the culture, customs and traditions of the countries I visit so I always default to the local customs when it comes to spending money.  With this in mind, you are always going to need cold hard CASH, the local currency, when making a small purchase.

There are many places where CASH is required in Europe.  Paying for drinks, snacks, an ice cream, a coffee, entrance fees, subway tickets, or even “splitting the bill” at lunch will require CASH.  In this article, I’ll discuss a few methods to get the CASH you’ll need for your travels and suggest that a debit card and ATM are, hands down, the best choice.

Travelers Checks – Don’t Do It!

Photo Credits: http://www.checkguarantee.com/
Once upon a time, travelers checks were the safest and best way to get your hands on the local currency in Europe. Forty years ago, I recall going to the bank with my granddad to purchase American Express travelers checks for my first-ever European adventure.  It was exciting handing over several hundred US dollars in exchange for a custom wallet filled with travelers checks.  I was even more excited when I walked into the American Express Office for the first time in Venice, spoke to a nice young lady in English and traded my travelers check for Italian Lira. 

That’s all different today.  I just did a quick search at the American Express website (http://www.americanexpress.com/us/content/prepaid/travelers-cheques/service-center.html)  for locations in my hometown to purchase AMEX Travelers Checks. Only three locations popped up and they were all banks.  Even worse, my search for exchange locations in Venice, Italy only returned five locations, three banks and two Travelex kiosks.  All five are known to give the poorest of the poor exchange rates. 

Traveler’s checks offer the poorest return on your investment.  Exchanging them for 
the local currency will always incur a fee and inflated exchange rates.  These are often hidden in the advertisement and promotions seen at the exchange kiosks.  I’ve done the calculations many times while waiting for a client to exchange travelers checks for cash. In every instance, after comparing the actual transaction receipt to the advertisement, there has been a discrepancy often costing 5%-7% more than the already expected dismal exchange rate.

I’m sure by now you realize that I’m not a big fan of travelers checks.   Given that, very few merchants will even accept them coupled with the high exchange rates. I strongly recommend that you use one of the following methods to acquire CASH when traveling abroad.   If you’re determined to purchase travelers checks, just in case, I suggest starting with the American Express site mentioned above or ask at your local bank.

American or Canadian Dollars – Not A Good Idea!

photo credit: https://upload.wikimedia.org/
Striking off on a trip with hundreds of dollars’ cash tucked away in your wallet or money belt is not really a good idea.   With that said, I do carry a few US dollars in my moneybelt if for no other reason than to have some when I arrive back home in the USA.   Additionally, it gives a bit of comfort knowing that in a pinch I can pull out a few US dollars and maybe have it accepted as a form of payment.   But usually the merchant will accept US dollars only as a souvenir to be placed on the wall in their place of business. Ha!

There was a time when US dollars were accepted all over the world, but now with the dollar’s weak value, especially in Europe, needlessly carrying them around makes little sense.   And from a practical standpoint, why take the risk of carrying lots of CASH and perhaps having it stolen.  

 It is possible to exchange your US dollars for the local currency at all airports and many major European cities.  Travelex and MoneyCorp along with reputable independent European vendors are big players in this industry and rightly so… they make big bucks exchanging one currency for another.  I suggest leaving your hard earned US dollars at home and get your CASH in Europe.

Buying Foreign Currency Before Your Trip– You’ll Lose!

It is possible to purchase Euros, Sterling or any foreign currency before you leave home.  Your local bank and several online agencies will be happy to sell you any foreign currency for a fee, of course.  One advantage of getting your foreign currency before traveling is simply for convenience. You don’t have to worry about it when you arrive at your destination.  But that’s the only advantage!  Ordering the actual foreign cash is big business and the banks and exchange agencies charge high exchange rates and exorbitant fees.   

Recently, I conducted an online search in which I wanted to order €100 cash and have it shipped to my home address.  The interbank exchange rate on this date (September 2, 2016) was listed as  €100 = $1.12 at http://www.oanda.com.

In the chart below, I have calculated the mark-up percentage based on picking the cash up at your local bank (not possible with Travelex) and having it shipped to your home via first-class mail.  Of course, the “% mark-up/shipping” will go down if you order more cash in one shipping, but it will never be less than the mark-up without shipping.

% mark-up/shipping
Bank of America
Well Fargo

Pre-Paid Debit/ATM Cards – Only If You Are Under Age 18!

Prepaid debit cards are available everywhere!  Go to any Walmart, Walgreens, Target or even the neighborhood gas station and you will see displays for these seemingly savvy debit cards. They all promise basically the same thing: the convenience of a debit card without age restrictions and a credit check. Simply preload the card with cash and use it almost anywhere a credit or debit card is accepted.

All of this sounds smart, but there are some drawbacks that could cost you a whole lot of money. All of these cards come loaded with fine-print contracts imposing charges and fees for each use. There are often fees associated with each ATM withdrawal, each credit transaction, each reload of funds and even each balance inquiry. Furthermore, the issuing bank will charge a markup percentage for each transaction made in a foreign country similar to the Travelex transactions mentioned in the above paragraph. With all this negative cash flow, what makes the card appealing for the European traveler?

A prepaid debit card may be the logical choice for a student under the age of 18 traveling to Europe. Most financial institutions will not issue a true debit card to persons under 18 years of age. Under 18s are usually issued an ATM card instead. These ATM cards do not carry the VISA or MASTERCARD logo and always draw funds from a savings account, not a checking account. Anyone holding such a card will get to Europe and find it will not work because ATM machines in Europe only accept debit cards with VISA or MASTERCARD logos, have a four-digit PIN number associated with it and draws funds from a checking account.

Cash Advance On Your Credit Card – Only in An Emergency!

A cash advance is a service available on most credit cards That allows you to walk into a bank or use an ATM to get local currency cash.   There is a limit to the amount of cash you can receive and it usually is the spending limit on your credit card. This is OK in an emergency situation, say if you have exhausted your bank account and need funds to get you home.  But for most situations it is a very bad idea.   All credit card companies advertise a more expensive interest rate for cash withdrawals than for purchases.   This often can be 10% or more.  My American Express and MasterCard card carries a 14.75% interest rate on purchases and 25.79% interest rate on cash advances. That is outrageous!  Enough said on this subject.

Debit Cards – Your Best Bet!

This is the best way to get cold hard cash while traveling in Europe!  There are ATM machines (often called Bankomats in Europe) everywhere and you treat them just like those here in the United States.  Simply insert your card, type in your PIN code and choose the cash amount. The machine makes some noise and then spits out cash in the currency of that country. 

Before traveling, find out what fees and conversion rates your bank will assess on foreign ATM transactions and purchases.  Often there is an assessment fee based on a percentage of your purchase and a transaction fee of $2-$5 if an ATM withdrawal.  Most banks use the lowest interbank exchange rate (the rate banks use to do business with one another) when calculating your exchange rate on any given day.

I have a good deal with my credit union! On ATM transactions, I receive the lowest interbank rate and no fees.  If using my debit card to make a purchase, I receive the lowest interbank rate and a 1% fee. 

Exchange rate
*Community 1st Credit Union FL
Interbank rate
Wells Fargo
Bank of America
$.05 mark up from interbank rate
$.05 mark up from interbank rate

*This is the credit union where I bank in my hometown.  These figures are verified by my bank statements.  As you can see, this credit union have the best rate for withdrawals for an international ATM.  Perhaps other credit unions have the same rates and policies?  I invite your comments. 

Even though this is the best way to get cash while traveling in Europe there is one drawback to using your debit card at ATM machines… the bank that own the ATM may charge a small fee of €2-5 for using their ATM machine. But for the convenience, it is nothing to worry about. To minimize these fees, I suggest making a few large withdrawals instead of a lot of little ones.  Also, check with your bank to see if they have a partner bank overseas. You can often withdraw money from these ATMs at no charge. Many ATM machines in Europe don’t give you a receipt, so don’t worry too much about that either. I make a note of each transaction to compare with my bank records either online or when I return home. There has never been a mistake! 

Points to consider when choosing a debit card:

  • Make sure it has a hologram logo (Visa is best). People have had trouble with cards that don’t have the hologram. A lot of the time the cards that don’t have the hologram are only ATM cards and not debit cards. You need a debit card! Contact your bank if you’re not sure what type of card you have.
  • Make sure the rear of your card sports one of three logos: PLUS, MAESTRO or CIRRUS.  These are the global cash networks managed by Visa and MasterCard. 
  • Often students under the age of eighteen are issued ATM cards by their bank. These often draw money from a savings account. Here in the USA these ATM cards work without a hitch.  But in Europe they seldom work!  Don’t bring such a card to Europe…it will just take up space in your money belt and get you no cash!
  • Make photocopies of your debit card as well as your credit card, passport and other important documents. Stick one copy in the bottom of your suitcase or moneybelt and leave another copy at home.
  • Try out your debit card at several ATM machines to make sure it works before leaving the country.
  • Notify your bank that you will be using your card abroad. Most banks will put a travel exception on the account so that your spending will be approved while traveling.  If you do not notify your bank or credit card company you will be denied access to your funds.


When traveling to Europe, you will at some point need cash. The best option is to bring a debit card. This can be used at any ATM and incurs the smallest fees. Check with your bank to see if they have an overseas partner. Credit cards can be used as an emergency backup if you don’t have cash. Visa and MasterCard are the most widely accepted. Remember to notify your bank and credit card companies that you will be traveling. Exchanging money or cashing travelers checks is time-consuming and expensive. Avoid these options if possible.

If you found this article informative, please share it with your friends, family, coworkers and associates. If you have something to add, just leave a comment in the box below.

Do you want to learn more about traveling to Europe? There is a wealth of information and special discount pricing on my tours at http://davidmcguffin.com/.

David McGuffin is Founder and CEO of David McGuffin’s Exploring Europe, Inc., based in Middleburg, Florida. You can connect with him on  Twitter,  Facebook,  Google+,  LinkedIn and YouTube. David spends his time in Europe organizing and leading small group and independent tours to European destinations. In business since 2001, David has provided exceptional travel opportunities to several thousand satisfied customers. You can find out more about David and his European tours at his website, http://davidmcguffin.com.


  1. Who knew it was so difficult nowadays to get your money's worth when travelling abroad. The last time I went to Europe there was no Euro. Thanks for the words of wisdom.

  2. Good info. It's a crazy world out there these days. It's good to know the best ways to get cash when you are abroad. Thanks for sharing...

  3. Great article! I never knew the disadvantages of Travelers check. I now know to use a debt care first.

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